WeightWatchers 2003 Annual Report Download - page 81

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WEIGHT WATCHERS INTERNATIONAL, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
(IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)
13. Employee Benefit Plans (Continued)
For certain senior management personnel, the Company sponsors the Weight Watchers Executive
Profit Sharing Plan. Under the Internal Revenue Service (‘‘IRS’’) definition, this plan is considered a
Nonqualified Deferred Compensation Plan. There is a promise of payment by the Company made on
the employees’ behalf instead of an individual account with a cash balance. The account is valued at
the end of each fiscal month, based on an annualized interest rate of prime plus 2%, with an
annualized cap of 15%. Expense related to these contributions for the fiscal years ended January 3,
2004, December 28, 2002 and December 29, 2001 was $774, $567, and $692, respectively.
During fiscal 2002, the Company received a favorable determination letter from the IRS that
qualifies the Company’s Savings Plan under Section 401(a) of the IRS Code.
14. Cash Flow Information
January 3, December 28, December 29,
2004 2002 2001
Net cash paid during the year for:
Interest expense .................................... $38,533 $41,588 $54,556
Income taxes ...................................... $59,739 $75,684 $39,474
Noncash investing and financing activities were as follows:
Fair value of net assets acquired in connection with the
acquisitions ...................................... $4,797 $ 461 $ 3,709
Liabilities incurred in connection with the public equity offering . — — $ 1,950
Liability incurred in connection with a noncompete agreement . . — — $ 1,200
15. Commitments and Contingencies
Legal:
Due to the nature of its activities, the Company is, at times, subject to pending and threatened
legal actions that arise during the normal course of business. In the opinion of management, based in
part upon advice of legal counsel, the disposition of such matters is not expected to have a material
effect on the Company’s results of operations, financial condition or cash flows.
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